31 sugar mills in Maharashtra stand to lose crushing licence over FRP

As many as 31 sugar mills in Maharashtra stand to lose their crushing licences for the current season after their failure to clear pending dues for the 2014-15 season.

As many as 31 sugar mills in Maharashtra stand to lose their crushing licences for the current season after their failure to clear pending dues for the 2014-15 season. These mills owe farmers R328-crore fair and remunerative price (FRP) dues, senior officials of the Maharashtra Sugar Commissionerate said.

These mills are likely to be given a final hearing before their crushing licences are cancelled, the officials said.

In addition to the 31 mills, around 14 other mills have not crushed this season. The authorities had issued notices to 51 mills in December for their failure to clear up dues of the last season.

Shivajirao Nagawade, chairman , Maharashtra State Cooperative Sugar Factories Federation, said they had sought an additional month from the commissonerate to be able to make payments. Mills are paying dues as per the availability of funds, he said.

For the current season, sugar mills have paid R2,551 crore out of a total payout of R6,197 crore as per the 80:20 FRP formula decided by the chief minister of Maharashtra at a meet held in Nagpur last month.

At a recent meeting, sugar commissioner Vipin Sharma had directed mills to pay up dues for the current season by December 31. It may be recalled that the CM had arrived at the FRP formula payment after an agitation by farmer organisation Swabhimani Shetkari Sanghatana (SSS). Since some of the mills are reported to have made payments after December 31, an updated report is likely to be taken up in the next fortnight after which a review may be taken up by the Commissionerate.

Sugar prices, meanwhile, continue to remain volatile getting millers in a flux. The federation of millers now intends to write to the NCDEX complaining of the manipulative trading and demanding a probe into futures trading. The issue is also likely to be brought up at the AGM meet to be held on Thursday at the Vasantdada Sugar Institute at Manjari, Pune.

Nagawade has alleged that a few trading companies have been indulging in manipulative practices on the futures trade and have earned profits of more than R1,000 crore in the last few days. Sugar prices have been volatile almost every hour on the index, he alleged adding that although 35 lakh tonne of sugar has been traded in the last four months at a value of some R9,000 crore, in reality, only 5 lakh quintals of sugar has been delivered.

“This is speculative and manipulative and a probe is required. The federation intends to take up this issue since neither mills nor farmers have benefited from the rise in prices. Only traders have been successful. The federation will demand a probe in such practices,” Nagwade said.